What is a split transaction? That is when you have one receipt for more than one category of spending. For instance, you go to the grocery store and buy food, makeup, and car wax.
Tracking Split Transactions
When you get home, you need to add up each category to track it. In the beginning, I actually paid separately for each category because I was concerned about ensuring that it was accurate.
Over time, I found that just grouping my items by category on the counter worked for me. As for the tax, I figure out the tax for all taxable items in the category (where I live, it is the amount times .065 – for you, just substitute your tax amount). If it is off by a penny or so, I don’t sweat it. In that case, I just add it to one of the taxable totals.
Tip! In YNAB, the Inflow field has a calculator. If you want to add up numbers, just type in the first number and click the mini calculator.
Then, the calculator will automatically appear.
Creating a Split Transaction in YNAB
Here are the steps to create a split transaction in YNAB. First, here is an image of a typical split in YNAB (click the image to enlarge it):
In the following instructions, I will take you through this example.
Note: Your Master and Sub categories will probably have different names. I’m just walking you through an example using my own YNAB.
- In your register, click the Add a New Transaction button.
- In this example, the Payee is Walgreens.
- In the Category, select Split.
- On that same line, put the TOTAL amount on the receipt ($83 in this case).
- Click on the Category field on the second line.
- Select the appropriate cateory. In this case, the Master Category was Grocery-Other and the Subcategory was Personal Care.
- In the memo, you can type a description of the item if you’d like.
- In the Outflow, type the amount you spent on that category ($10 in this case).
- Follow steps 5-8 to fill in the other items.
What if you also get cash back when you shop? How do you reconcile that?
Getting cash back is just moving existing money from one theoretical envelope to another. It’s not income, but is part of the transaction and is just moved into your Cash account from your checking account. This is where we will use the Transfer function in YNAB. So be sure you have set up a Cash account in YNAB before proceeding.
Let’s continue with our example supposing that we got some cash back in this transaction. Here is the image with cash back included (click the image to enlarge it).
- If you don’t have any additional lines available, click the Add a new sub-transaction button on the bottom of this transaction to add more lines.
- In the Payee, you will type the word Transfer and you will see a list of all your other accounts in YNAB.
- Select the Cash account.
- There is no need to select a Category in this case (in fact, you can see that in Category, it says in light gray “(Category not needed).”)
- Type a memo note if needed.
- Type the amount of cash you receive in the Outflow.
Note: Remember, this is not income or new cash, but actual money coming OUT of your checking account.
- Be sure the Amount remaining to assign is 0. If so, you can click the Done button (not shown here).
The transaction will now show up in your register. And the cash will now show as an Inflow into your Cash account.
In my next post, I will explain split transactions that contain both inflows and outflows.